Hotel prices in Dubai are falling because of strong market saturation

Hospitality industry insights

Dubai ended the year with more than 60 new hotels, which represent almost 10% increase in one year only. It’s true that increase of guests is expected for Expo 2020, but for hotels to survive on the long run, they need to compete with more and more competition. The result of strong market saturation is a drop of the price of the stay by approximately 12%.

To compensate that loss, the hotels began targeting not only the tourists but also the locals. They began offering tea parties, brunches, Christmas dinners…

Strong market saturation is new phenomenon in Dubai

Choice in hospitality sevices in Dubai is enormous

Strong market saturation encouraged locals to start new trend

Because of affordable out of season prices, locals can afford holidays in most luxurious hotels for small amount of money. Better offers and the fact that only hotels bars can serve alcohol are only a plus. More and more locals and people who work here started a trend of vacations near home, called staycations. It is a cheap way of experiencing Dubai as a tourist at its full potential, without travelling hundreds of miles with plane transit.

Similar trend appeared also in Latin America where you can book a thematic room like Arctic, Safari, Arabic or with private jacuzzi, fitness equipment, poles… The thematic rooms are very popular for hen parties or when a group of friends go partying for the weekend in the local city.

There are many reasons why people book local hotels. Some take them because they are cheaper than normal vacations, some because they need a short break and some as they want to experience local spot like a tourist. Whichever the reason, if the hotels want to be competitive on the long run, they need to understand all new trends and new technology, which can give them a notch compared with the competition.

Large variety of choice is cause for lower prices

In Dubai we can find quite a lot of unique and fascinating hotels. For example: Gevora is highest hotel on the world. Paramount Hotel has each room differently furnished in style of their moves. But this city still has to offer much more, like designer hotels Armani, Bulgari and Palazzo Versace.

Hotels earn 12% less because of strong market saturation

Versace is one of most luxurious hotels in Dubai

Because of strong market saturation, hotels started specialising in various segmentations and differentiations of offers and services. In the area of DIFC (Dubai International Financial Centre) clients can book conference halls and business rooms in hotels. Marina and Palm Jumeirah area are usually booked by families because of large varieties of hotel pools, water parks and landscaped beaches. Internet city is a place where young people usually find their stay because of their Boutique hotels. Those are small design hotels with its individual style, atmosphere and a personalized approach to every guest.

Will hospitality market saturation grow in 2020?

Increased size of market is also a result of Expo 2020 expectations. It is no secret that Dubai is very popular among tourists, in fact 16 million people chose to spend their vacation there. But there are lot more of those passengers that just transfer in the airport. Numbers show that next year they can expect more than 20 million people and since Dubai is hosting Expo 2020, they are planning for additional 5 million at the time of event. Current plans are to prepare 160 thousand hotel rooms to satisfy all incoming clients, customers, visitors and tourists.

Strong market saturation is cause of falling prices

Our expectations for Expo 2020 are skyrocketing

Nevron is following technological innovations as well as hospitality trends and can help hotels to get that notch with their excellent knowhow and fully featured IPTV solution.

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